Case Law Details

Case Name : Muscat Polymers (P.) Ltd. Vs Commissioner of Central Excise (CESTAT Ahmedabad)
Appeal Number : Final Order No. A/1670-1671 OF 2011-WZB/AHD.
Date of Judgement/Order : 26/09/2011
Related Assessment Year :


Muscat Polymers (P.) Ltd.


Commissioner of Central Excise

FINAL ORDER NOS. A/1670-1671 OF 2011-WZB/AHD.

APPEAL NOS. ST/400 and 488 OF 2010

SEPTEMBER 26, 2011


The credit of Service Tax paid on mobile telephone services has been disallowed on the ground that invoice is in the name of the company C/o employee’s name. Further, it has also been held that the appellant had not produced any evidence to show that mobile telephone was used exclusively for business activity of the company. The appellant is aggrieved by this decision and is in appeal. Revenue is also aggrieved that penalty under Section 78 of Finance Act, 1994 has only been imposed and no penalty under Section 76 of Finance Act, 1994 has been imposed.

2. Heard both sides.

3. In this case, there is no dispute that even though the bill is in the name of company C/o employee’s name, the payment for the service has been made by the company only. I also find that the submission of the appellant that employee’s name was put for internal purpose is also reasonable since the company has to know who is utilizing the telephone so that they can monitor the utilization and also ensure that phone is not misused. When the telephone itself is listed in the name of company and given to employee for official use, the requirement observed by the Commissioner that the company has to show that all calls made were relating to business would result in voluminous work for both sides, which would be unproductive. I also find that without insisting on such requirement, credit of Service Tax paid on mobile telephone service was allowed by this Tribunal in the case of CCE v. ITW India Ltd. [Final Order Nos. A/1657-1658 of 2009, dated 28-7-2009] as also by Hon’ble High Court of Gujarat in the case of CCE v. Excel Crop Care Ltd. [2009] 20 STT 164.

4. In view of the fact that the issue is covered by the decision of Hon’ble High Court of Gujarat, I find that the appeal has to be allowed and the appeal is allowed accordingly. Once the appeal is allowed on merit, question of imposition of penalty under Section 76 as also under Section 77 of Finance Act, 1994 does not arise. As a result, the appeal filed by the Revenue is required to be rejected.

5. In the result, the appeal filed by the appellant is allowed and the appeal filed by the Revenue is rejected.


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One Comment

  1. Gunjan Jayant says:


    Hope you are doing good

    I wanted to confirm how many kind of taxes will be applicable in company,if i am working in mobile manufacturing and in which category this co. would be fall? please provide me the information in vat as well as service tax. Co. is located into greater noida.

    [email protected]

  2. manoj says:

    Dear sir or madam,

    My self Manoj gupta and right now m working in Logistics company (freight forwarding) actuly I wanted to know that can we take CENVAT credit of service tax in telephone bill which we are using in office for business purpose.

    Manoj gupta


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